Jump to content
  • Amazon takes $7.6 billion loss on Rivian stake after EV company’s stock plunge

    ghost

    • 474 views
    • 2 minutes
     Share


    • 474 views
    • 2 minutes

    Amazon invested in electric vehicle maker Rivian in 2019 as part of a plan to go green. During the first quarter, it saw nothing but red.

     

    In its earnings report on Thursday, Amazon took a $7.6 billion loss on its stake in Rivian. Shares of the EV manufacturer plummeted by more than 50% in the first three months of 2022, reversing course from the fourth quarter, when the company held its stock market debut and saw its value skyrocket.

     

    While Amazon has big ambitions for Rivian, signing an agreement for the production of 100,000 delivery vehicles by 2030, current market conditions are rough. Rivian said last month that the company expects to produce just 25,000 electric trucks and SUVs this year, half of the number forecast to investors last year as part of its IPO roadshow.

     

    Like most manufacturers, Rivian is battling through supply chain constraints and internal production snags. But Rivian was valued at $86 billion after its IPO pop, making the stock particularly vulnerable to a major pullback.

     

    107053233-1651172740629-rivn_vs_nasdaq_t

     

    The Nasdaq Composite dropped 9.1% in the first quarter, its worst period since the first quarter of 2020, when the Covid-19 pandemic was beginning. The riskiest bets took the biggest hits as investors rotated into assets considered safer in a period of rising inflation and interest rates.

     

    Rivian’s drop has continued into the second quarter, with the stock plummetting another 36%. It’s now more than 80% off its high from November.

     

    On Wednesday, Ford took a $5.4 billion loss on its 12% stake in Rivian. Amazon has a roughly 18% stake, according to FactSet, investing a total of more than $1.3 billion into the company.

     

    Amazon’s markdown is particularly large, but it’s not the only tech company that’s taking a beating on its equity investments.

     

    Earlier this week, Alphabet recorded a $1.07 billion loss on its investments “given market volatility.” Alphabet’s investment arms have backed companies including UiPathFreshworksLyft and Duolingo, which have all gotten caught up in the market swoon.

     

    Microsoft said this week that its first--quarter profit took a $174 million hit in part due to “mark-to-market losses on our equity portfolio.” And last week Snap said it had a $92 million unrealized loss “on investment that became public in H2 2021.”

     

    CNBC


    User Feedback

    Recommended Comments

    There are no comments to display.



    Join the conversation

    You can post now and register later. If you have an account, sign in now to post with your account.
    Note: Your post will require moderator approval before it will be visible.

    Guest
    Add a comment...

    ×   Pasted as rich text.   Paste as plain text instead

      Only 75 emoji are allowed.

    ×   Your link has been automatically embedded.   Display as a link instead

    ×   Your previous content has been restored.   Clear editor

    ×   You cannot paste images directly. Upload or insert images from URL.


  • Recently Browsing   0 members

    • No registered users viewing this page.
×
×
  • Create New...